Shareworks Global Intelligence newsletter provides an overview of recent changes affecting employee share plans globally.
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Please find below the Shareworks Global Intelligence overview of certain changes affecting employee share plans globally. This issue also highlights certain upcoming global filing and reporting requirements (for the parent company or local company).
As always, please feel free to contact us if you need further assistance.
Country Updates
Argentina: Social Security Quarterly Thresholds Updated
The Social Security Administration (Administración Nacional de la Seguridad Social) published new minimum and maximum monthly salary thresholds for purposes of computing employers' and employees’ social security contributions. These following thresholds are applicable from June 1, 2020 onwards:
- Minimum salary: ARS 5,679.80
- Maximum salary: ARS 184,591.18
This information has been provided by our collaborating law firm in Argentina, Nicholson y Cano Abogados (contact: Cecilia Martin at cmartin@nyc.com.ar and Emiliano Silva at esilva@nyc.com.ar)
Argentina: New Rules for Accessing Argentinian Foreign Exchange Market
The Argentinian Central Bank has released increasingly restrictive rules for accessing the foreign exchange market and added a 90-day delay restriction on the purchase of foreign currency. This means that individuals relying on the available exemption to purchase up to USD 200 worth of foreign currency per month must now confirm that within the 90-day period prior to such purchase they have not sold securities (or transferred such securities to a depository entity abroad) in foreign currency. Such individuals must also not carry out any such transaction for an additional 90-day period following the purchase of the foreign currency.
This new restriction may affect the administration of stock option awards as well as share purchase plans, subject to general legal requirements such as prior Central Bank approval where applicable.
These rules also apply to the payment of profits and dividends from Argentina.
This information has been provided by our collaborating law firm in Argentina, Nicholson y Cano Abogados (contact: Cecilia Martin at cmartin@nyc.com.ar and Emiliano Silva at esilva@nyc.com.ar)
Egypt: New Progressive Tax Rates
Effective from July 1, 2020, new progressive tax rates will be introduced on employment income. These rates will also become applicable for other types of income (e.g., business income, income from independent professional activities) effective from January 1, 2021. Under the new system, the individual’s annual income will determine the applicable progressive tax rate.
The progressive rates for annual income not exceeding EGP 600,000 are set forth below.
| Annual taxable income (EGP) | Tax rate |
|---|---|
| 0 - 15,000 | 0% |
| 15,001 - 30,000 | 2.5% |
| 30,001 - 45,000 | 10% |
| 45,001 - 60,000 | 15% |
| 60,001 - 200,000 | 20% |
| 200,001 - 400,000 | 22.5% |
| 400,001 - up | 25% |
For persons with an annual income exceeding EGP 600,000, the lowest applicable bracket rate is adjusted depending on the annual income as follows:
- For persons with an annual income between EGP 600,000 and 700,000, the rate of 2.5% will be applicable on all income up to EGP 30,000 (i.e., the top 6 tax brackets are applicable to the income earned)
- For persons with annual income between EGP 700,000 and 800,000, the rate of 10% is applicable on all income up to EGP 45,000 (i.e., the top 5 tax brackets are applicable to the income earned)
- For persons with annual income between EGP 800,000 and 900,000, the rate of 15% is applicable on all income up to EGP 60,000 (i.e., the top 4 tax brackets are applicable to the income earned)
- For persons with annual income between EGP 900,000 and 1,000,000, the rate of 20% is applicable on all income up to EGP 200,000 (i.e., the top 3 tax brackets are applicable to the income earned)
- For persons with annual income exceeding EGP 1,000,000, the rate of 22.5% is applicable on all income up to EGP 400,000 (i.e., the top 2 brackets are applicable to the income earned).
This information has been provided by our collaborating law firm in Egypt, Shalakany Law Office (contact: Emad El Shalakany at ess@shalakany.com)
Kenya: Updated Individual Income Tax Bands
Effective from April 25, 2020, the income tax bands in Kenya have been increased as follows:
| Annual taxable income (KES) | Tax rate |
|---|---|
| 0 - 288,000 | 10% |
| 288,001 - 488,000 | 15% |
| 488,001 - 688,000 | 20% |
| 688,001 - up | 25% |
This information has been provided by our collaborating law firm in Kenya, Dentons Hamilton Harrison & Mathews (contact: Richard Omwela at romwela@hhm.co.ke)
Mauritius: Budget 2020-2021
Effective September 1, 2020, pursuant to the new national budget, the National Pension Fund will be abolished and replaced with a new system, the Contribution Sociale Généralisée (CSG). The contributions to the CSG will be as follows:
| Monthly Income (MUR) | Employee's contribution (%) | Employer's contribution (%) |
|---|---|---|
| 0 - 50,000 | 1.5 | 3 |
| 50,000.01 - up | 3 | 6 |
Effective July 1, 2020, the Solidarity Levy currently levied at a rate of 5% on Mauritian citizens having chargeable income plus dividends in excess of MUR 3.5 million per year will be increased to 25% on leviable income in excess of MUR 3 million for the 2020-2021 tax year. The levy will be payable under the Pay-As-You-Earn system (PAYE).
This information has been provided by our collaborating law firm in Mauritius, Edward Nathan Sonnenbergs (contact: Thierry Koenig at tkoenig@ensafrica.com)
Tanzania: Updated Income Tax Bands
As proposed under the new finance bill, the income tax bands applicable on individual income will be increased, reducing the annual tax burden on individuals.
The new proposed tax bands, and tax rates, effective from July 1, 2020, but which remain subject to parliamentary discussion, are as follows:
| Annual taxable income (TZS) | Tax rate |
|---|---|
| 0 - 3,240,000 | 0% |
| 3,240,001 - 6,240,000 | 9% |
| 6,240,001 - 9,120,000 | 20% |
| 9,120,001 - 12,000,000 | 25% |
| 12,000,000 - up | 30% |
This information has been provided by our collaborating law firm in Tanzania, Edward Nathan Sonnenbergs (contact: Megan McCormack at mmccormack@ensafrica.com)
Upcoming Filing and Reporting
Portugal: Equity Reporting
June 30, 2020
Affects: Local Company
Employers in Portugal must submit Form Modelo 19 with details of the creation and application of all share plans set up for the benefit of its employees by 30 June following the tax year.
China: SAFE Quarterly Reports
July 3, 2020
Affects: Local Company
Companies that have obtained SAFE approval for their equity plans in China are required to file quarterly reports with their local SAFE office within three business days following the end of the relevant quarter.
Saudi Arabia: Quarterly Equity Reporting
July 10, 2020
Affects: Parent Company
Companies offering share plans to employees in Saudi Arabia under the revised securities law exemption must notify the Capital Market Authority (“CMA”) within 10 days after the end of the quarter following grant disclosing the total number and value of all offers made to employees during the preceding quarter. This notification can be made by an authorised person or by the company. Plan amendments or changes may also require additional filings with the CMA.
Australia: Employee Share Scheme Statement
July 14, 2020
Affects: Local Company
The annual reporting deadline for Australian employers is approaching. Companies that have a presence or employees in Australia and operate an equity plan must issue an Employee Share Scheme Statement to each employee who had a reportable taxing point in the prior tax year by July 14. In addition, an Employee Share Scheme Annual Report must be electronically filed with the Australian Taxation Office by August 14.
India: Employer Tax Filings
July 15, 2020
Affects: Local Company
Indian employers are required to file Form 24Q with the Indian tax authorities on a quarterly basis. These quarterly returns report information on employment income paid to employees (including from share-settled awards) as well as taxes withheld.
The quarterly returns must be submitted by:
- May 31 for the quarter ending March 31
- July 31 for the quarter ending June 30
- October 31 for the quarter ending September 30
- January 31 for the quarter ending December 31
Upcoming Events
NASPP Conference & Exhibition 2020
September 1-10, 2020
The annual National Association of Stock Plan Professionals (NASPP) Conference & Exhibition goes virtual.
More info: https://conference.naspp.com/event/376df509-7b86-47ea-82eb-06d5178bf3a5/summary
